Friday, February 5, 2016

Natural Gas: EIA Weekly Supply/Demand Report

A quick heads-up, next week we'll be writing about Rossby waves and how their interaction with the jet stream looks to be setting up a long trade before we head into the widowmaker shoulder season.
I know I'm all atingle.
$2.036 up 0.064.
From the Energy Information Administration:

Natural Gas Weekly Update 
Natural gas prices decline. Temperatures were significantly warmer this report week across most of the country, and natural gas prices fell at most locations across the country. Natural gas markets appeared to reflect Punxsutawney Phil's prediction for an early spring, as temperatures were mild through much of the United States this week, and residential and commercial consumption declined. Likely in response to warmer weather and lower consumption, the Henry Hub spot price fell from $2.24/MMBtu last Wednesday to $2.06/MMBtu yesterday, February 3. At the Chicago Citygate, the spot price fell from $2.22/MMBtu last Wednesday to $2.07/MMBtu yesterday. Similarly, west of the Mississippi River, prices declined as well. In the Rocky Mountains, the spot price at the Opal Hub in Wyoming opened the report week at $2.07/MMBtu and ended yesterday at $2.01/MMBtu. At the PG&E Citygate in California, natural gas prices fell from $2.46/MMBtu last Wednesday to $2.27/MMBtu yesterday.

Northeast prices fall. Prices in the New York and Boston areas generally trade at a premium of several dollars per MMBtu above the Henry Hub spot price in times of high consumption, but tend to trade below this national benchmark in times of milder weather. This week, prices at both these market locations fell below the Henry Hub spot price as temperatures warmed up. At the Algonquin Citygate, which serves Boston, prices fell from $3.52/MMBtu last Wednesday to $1.90/MMBtu yesterday. Boston-area prices fell throughout the week. At Transcontinental Pipeline's Zone 6 trading point serving New York City, prices fell from $2.43/MMBtu last Wednesday to $1.79/MMBtu yesterday....

... Production rises. Dry natural gas production rose 0.8% week over week and is 0.5% greater than the same week last year, according to Bentek data. Bentek also noted that production from the Northeast (which includes the Marcellus and Utica formations) has been at record levels in recent weeks. U.S. imports of natural gas from Canada fell 12.2%. Declines in imports in the West and Northeast offset a slight increase in imports to the Midwest. LNG sendout declined by 31.1%.

Heating consumption falls substantially. U.S. consumption fell by 14.3%, driven by a large decrease in residential/commercial consumption. According to Bentek data, residential/commercial consumption, which is largely used for heating, fell by 20.6%. Industrial consumption fell by 4.4%, and consumption of natural gas for electric power generation fell by 11.3%, both of which are also affected by changing temperatures, but to a lesser degree than residential and commercial customers. U.S. exports of natural gas to Mexico increased by 10.5%....MUCH MORE 
Mean Temperature (F) 7-Day Mean ending Jan 28, 2016